Sberbank sees big opportunity for CBDC in India-Russia settlement

Russia’s largest lender Sberbank sees significant potential for central bank digital currencies (CBDCs) to facilitate bilateral trade settlements with India, Herman Gref, CEO and chairman of the executive board of Sberbank, said on Friday. The central banks of both countries are working on a mechanism that could make cross-border payments faster and more efficient, he added.

“Now is just the beginning. We see a huge opportunity for digital currency for all settlements between countries,” Gref said during a media briefing on the sidelines of the BRICS summit in Delhi. He said that settling trade through digital currencies is more efficient and that digital currencies will see more demand and faster growth.

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“The Central Bank of Russia and the Central Bank of India are working very precisely on this and we have tried to support them because we need such a tool,” Gref said.

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Central Bank Digital Currencies (CBDCs) can improve trade settlements by making cross-border payments faster and more efficient, solving problems faced by traditional payment systems such as SWIFT.

The CEO of Sberbank highlighted the significant potential of CBDC in facilitating trade between India and Russia, stressing that digital currencies are expected to see greater demand and accelerated growth.

Trade has expanded sharply due to increased imports of discounted Russian oil and other commodities to India, which make up the bulk of bilateral trade, currently about $60 billion.

Sberbank aims to act as a bridge for Russian companies entering India and for Indian businesses looking to expand into Russia, facilitating greater economic engagement between the two nations.

Sberbank has indicated that the issuance of excess Indian rupees is no longer significant and is now using this liquidity effectively to support its operations and investments in Indian government securities.

The comments come as India and Russia seek to improve ways of settling their expanding bilateral trade. BRICS countries are also working towards greater connectivity between their payment systems, which could potentially reduce reliance on traditional cross-border payment infrastructure such as the SWIFT network. The matter gained prominence after major Russian banks were cut off from SWIFT following the Russian invasion of Ukraine in 2022.

On September 1, Russia began rolling out its central bank digital currency, the digital ruble, through systemically important banks, including state-controlled Sberbank. India to launch digital currency pilot in 2022.

Gref also said that the Indian rupee surplus problem that Sberbank faced in the previous year was no longer significant. The bank uses excess rupee liquidity to support its operations, including through investments in Indian government securities. “Our system is now working more efficiently than before. Last year we had a problem of surplus rupees, but this year there is no such problem,” he said.

The comments are significant as Indian rupee balances accumulated by Russian entities in vostro accounts have proven to be a problem in bilateral trade settlements. Vostro accounts are maintained by foreign banks with Indian lenders to facilitate rupee transactions. Recent comments from Sberbank suggest that the lender is now able to deploy such liquidity more effectively.

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Expansion of India

At the same time, Sberbank is seeking to significantly expand its presence in India. The lender has applied for 10 branch licenses from the Reserve Bank of India to open branches in 10 cities and is awaiting regulatory approval, Gref said.

The bank currently operates in India through branches in New Delhi and Mumbai. Asked if Sberbank plans to convert its Indian operations to a wholly-owned subsidiary, Gref said: “There is no immediate plan.

Along with this branch expansion, Sberbank is establishing a larger commercial presence in the national capital. The lender has acquired two office buildings in New Delhi, which are under construction and are expected to be operational by 2028. The complex, with a total area of 48,000 square meters, will house the headquarters of Sberbank, as well as a business center for Russian and Indian companies that want to expand bilateral trade.

The project is the largest in Russia investments in the Indian commercial real estate market, according to Sberbank. The bank said the facility will create a platform for companies from both countries to develop business cooperation.

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Digital ecosystem

Sberbank is also developing a digital ecosystem to connect Indian and Russian businesses. It announced an information technology platform developed with major Indian companies that will provide Indian businesses with information on Russian market opportunities, regulatory frameworks and potential partners.

The bank is trying to boost India’s exports to Russia and reduce what Gref described as a roughly $50 billion trade imbalance in favor of Russia. Sberbank expects to serve more than 15% of the total business turnover between the two countries by the end of this year.

India and Russia are working towards a target of $100 billion in bilateral trade and $50 billion in two-way investment by 2030. Bilateral trade currently stands at around $60 billion, according to figures presented at the briefing.

Gref said Sberbank also sees opportunities for partnerships with India in financial services, technology, education and healthcare. The bank is keen to find partners for high-tech projects and also participate in large-scale infrastructure projects in India.

Sberbank also recently launched a product that allows account holders to invest in Nifty 50 stocks, Gref said. The lender said it has been developing its financial business in India for 16 years, serving tens of thousands of corporate clients in the India-Russia trade corridor. Sberbank said its business in India has grown at least tenfold over the past five years.

Bridging the gap

Gref said the bank seeks to act as a bridge for Russian companies and investors entering India and for Indian businesses looking to expand into Russia, while building financial and technological infrastructure to support greater economic engagement between the two countries.

Bilateral trade in goods between India and Russia has expanded sharply in recent years, reaching nearly $60 billion in fiscal year 2025-26 (and a record high of about $68.7 billion in fiscal year 2024-25), a more than four-fold increase from about $13 billion in fiscal year 2021-22, according to a statement by External Affairs Minister S. shop.

The increase was largely due to India’s imports of discounted Russian oil and petroleum products (accounting for more than 80% of inflows and totaling around $55 billion over the past full year), along with fertilizers, coal and other commodities, while India’s exports to Russia — mainly pharmaceuticals, chemicals, engineering goods, marine products, much less than $5 billion, and tea.